Chapter 1
In the first Chapter of this book, the author starts to inform you about Brazil, using facts about all different aspects of the country. They tell you about the recent financial struggles the country is going into again, as the economy has always showed signs of starting to build, only to deteriorate as quickly as it rose. The chapter mainly talks about the president from 2003 to 2011, Luiz Inacio Lula da Silva. Lula had run for president three times before becoming president in 2003, and he sees a lot of potential in the country, as do many of its citizens. In a business meeting he spoke heavily on the point of instilling a "silent revolution" in Brazil. This meant gaining back the self-esteem that they had once had. Some facts about brazils rise to a world exporter, it is currently the third largest food exporter and the FAO says it will be number 1 by 2025. The country hit some of the largest oil strikes of the 21st century, and it is the world leader in plant-based fuels. Some 70 percent of the Amazon Rainforest is in Brazils borders, and it was ranked the worlds sixth biggest manufacturing power in 2010. They continue to talk about income and other facts about Brazil in relation to the world, but they come back to an idea that is common in Brazil. This idea is "hope followed by disappointment" as Cardoso stated. When an Austrian writer moved to Brazil in 1940, named Stephan Zweig, he wrote a book called, Brazil the land of the future, but later on many just remembered the tag that was placed on it "and always will be" which started as a joke, but over and over again was true. They talk about the World Cup and Rio Olympics that were just held there and how the country will be put on display in a new light than before. These games are a chance to show Brazil in the state that it is today. They talk about where the book will go in the upcoming chapters, discussing the history that not many fully understand, stemming from Portugese roots, and the rise of colonies that later turned into Brazil. There are many things that I did not know about Brazil before reading this and one is that there was racial segregation back when the country first started, though it was not as bad as in America. There are many things that I will learn reading this book, especially this first part as they will talk of the history which lead to the Brazil that became popular in the late 1900s, and the Brazil we know today.
Chapter 2
Most of Brazil is in the Tropics, which is generally consistent with its weather patterns all year round. The countrys tallest mountain is only 3000 feet above sea level, and there is a lot of water. Three major river basins separate the country, The Amazon, the Parana in the southwest, and the Sao Francisco. The Amazon rainforest covers half of the country. Brazilians divide the country into 5 regions, the south, the south-east, the Center West, the North East, and the North. The coastal strip is the most populous area in Brazil. The south is a temperate zone that attracted many European migrants and farming. This area is also known for the blonde Brazilians who confound the stereotypes here. The south-east is Brazils heartland, and economic powerhouse. Close to ¾ of a billion people live here, and the two biggest cities in Brazil are found here. One of these cities is Rio de Janeiro. Rio is a city comprised mainly of Portugese and African descendents. The citizens here are called cariocas, and are notorious known for partying harder than they work. Oil strikes off the shores of Brazil have risen the economy in Rio and other such places like Sao Paolo. Sao Paolo, along with Minas Gerais, was mainly important for its coffee production and the industrialization which made it one of the fastest growing cities in the world through the 20th century. In the 1990’s, the city turned its back on its industrial roots and became known for its business, finance, and pure cultural influence. In this part of Brazil, the rich live lavishly while the hustle on the street to get places can be daunting. There are a lot of suburban areas around this city, which shows that it was put up very fast and the culture is just now catching up with the industrialization that took place over the last 50 years. With this being said, the economy is rising, and greater than that of Argentina, Uraguay, and Paraguay combined. The North-east is Brazils poorest area, with cotton and sugar farming the two products farmed for the most. Inland there is place called Sertao, which is home to cattle farming and subsistence. Salvador is the countrys center of black culture and music. The center west is a fast growing region both economically and by populous. The agricultural frontier is here and soy-bean, sugar, and cotton are all common. The praries in Brazil are also here, providing a checkerboard pattern of different colored grasses from an overhead view. The north is comprised of 6 states, and 2/5 of Brazils total area is in the north. This is a poor area as well, yet is growing in population. What people call the “legal Amazon” is located here, taking up the north, the Mato Grosso, the Tocantins, and the western half of Maranhao.
Brazil is also known for its teamwork, and one way they prove they work well together is on the football pitch. The Brazilians, who played football as if it were a dance, according to Gilberto Freyere, perfected o jogo bonito or “the beautiful game”. Their success on the pitch gave Brazilians a national identity, and football is known to be one of the strongest religions in the country. The country respects the national team whenever they play in the world cup by virtually shutting down its streets. Carnival is another expression of teamwork that Brazil has, featuring samba music, the music of carnival. In Salvador, there is a deafening party on the streets, in Rio there is competition between neighboring samba schools. These institutions have much influence in the community as it provides community projects and preparation leading up to the event. Carnival also has its own attire called uma fantasia, meaning fancy- dress, and this attire allows the free movement of space for people where there is repression or prejudices. Brazilians are also very concerned with their appearance, and are the number one spenders on beauty products. The beach also plays a major role in the country so their appearance must always be kept up. Brazilians also more or less invented plastic surgery as an industry. Religion is also big here, along with the soap opera and carnival, but this all leads to the family, which is the essential institution in Brazil.
Brazil is also known for its teamwork, and one way they prove they work well together is on the football pitch. The Brazilians, who played football as if it were a dance, according to Gilberto Freyere, perfected o jogo bonito or “the beautiful game”. Their success on the pitch gave Brazilians a national identity, and football is known to be one of the strongest religions in the country. The country respects the national team whenever they play in the world cup by virtually shutting down its streets. Carnival is another expression of teamwork that Brazil has, featuring samba music, the music of carnival. In Salvador, there is a deafening party on the streets, in Rio there is competition between neighboring samba schools. These institutions have much influence in the community as it provides community projects and preparation leading up to the event. Carnival also has its own attire called uma fantasia, meaning fancy- dress, and this attire allows the free movement of space for people where there is repression or prejudices. Brazilians are also very concerned with their appearance, and are the number one spenders on beauty products. The beach also plays a major role in the country so their appearance must always be kept up. Brazilians also more or less invented plastic surgery as an industry. Religion is also big here, along with the soap opera and carnival, but this all leads to the family, which is the essential institution in Brazil.
Chapter 3
The portugese set foot on Brazilian land in the spring time during the fifteenth century. Pedro Alvarez Cabral led an expedition from Portugal, comprising 13 ships and 1500 men, looking for new land. The Portugese, by this time, were the most seafaring nation in Europe, and though Christopher Columbus had already been to the Americas three times before, this was a very important trip because Portugal was the first nation-state in Europe. So when Cabral made his expedition, there was already a lot of knowledge and tools that they had received from trading with the Arabs. Though Portugal had set up trading posts up and down the coast of the country, Lisbon being one, they knew that there was more to be found if they could get a large group of men together to conquer new lands, so Portugal and Castille got together and got permission to go to the new land and use Christianity to ‘reduce’ its citizens.
When the first ship arrived, it was Nicolau Coelho who went to the first beaches and saw the natives of this new land. He described them as fit and beautiful. They wore no clothes and were experts at hunting and gathering. They lived in communal huts, with a village holding about 300 to two thousand people. The metal tools that had been brought over fascinated these people, and it was obvious that the natives of these lands were not as evolved and were still living in the stone age. After only a week or so, Cabrals fleet left and sailed toward India. Later on though, the Portugese leaders sent another expedition of three ships to explore the coast of Brazil. When they got there the captain mistook the mouth of the bay for river, and named the place Rio de Janeiro, meaning river of January. They also found trees that resembled ones they had found in asia, called pau brasil, and the name stuck. It wasn’t until centuries later when the word brasileiro meant nationality, and not someone who was a woodcutter.
Unlike the British and Spanish colonies in the Americas, the Portugese remained friendly with their native Indians to the land. They lived with them, and some leaders ended up living as a native, enjoying the native lifestyle. Eventually when the French started to appear on the coast, the Portugese leader set up 15 colonies along the coast and lent them to other people. When that didn’t work the Portugese started setting up major cities to control the sugar and wood trade. The jarring thing that the Portugese found about the land and their native inhabitants, was the the Indians were cannibals, and so they were seen as devils. They also waged wars against any Indians who were not willing to convert to Christianity. Possibly the real threat to these Indians were in fact a spread of diseases brought over from Europe. When the Indians were gathered together, disease would spread quickly, wiping out a good portion of a group.
After settling in Sao Paolo, the first significant inland colony for the Portugese, much of the contact with Indians was to find more to bring back as slaves. The search for slaves and other things valuable like gold and silver, were called bandeiras, and these trips became a way of life for the portugese and mamelucos. Bandeirantes were crutial in the movement west in Brazil, setting the boundries much farther than the Treaty of Tordesillas had originally intended. The Jesuits also had a lot to do with this as they were the rivals of the Bandeirantes, so competition to get a lay of the land first was fruitful. In the 300 years since Cabral had set foot on the land, the Indians had been reduced to a population of about 600,000 people, and at about this time, Pombal set all Indians free of forced labour. Brazilians still use many tupi words today and learned many things about the land from the tupi. Many spices and flour, as well as the cleanliness and sexual candour that the Tupi had enjoyed, are still characteristic of Brazilians today.
Sugar was the main crop the portugese had started planting, receiving it from Asia. Between the 1570s and 1670s, and again today, Brazil was and is the largest exporter of sugar. Indians were initially used in the labourous process to convert the sugar cane, but eventually African slave trade became more popular here and in the rest of the Americas, though Brazil did not invent it. Slavery was practiced by the Greek and Romans, and in the sixteenth century, the Atlantic slave trade became an international commercial system. Sugar farming required large amounts of land, capital, fuel, and labour, so farming for this was hard work. The capital produced by these sugar plantations was only reached because of how quickly they could be up and running and productive. This was only possible with the labor of slaves. At one point, Brazil was importing more African slaves, and for longer periods of time, than any other country, which is why there is still a racial stipulation between blacks and lighter skinned people in Brazil. The reason transport of African slaves was so easy for Brazil, was because the distance travelled by sea was far shorter than any other European nation to the Americas. Slaves were also in high demand because the land could be very unforgiving at times, with some terrain uncrossable. Also pests and plagues regularly would kill off many farmers crops and livestock. One priest said that for the good deeds done by the slaves, they would see that the tables will turn in the afterlife.
When word got out that there was finally gold and diamonds discovered, people came from all over Brazil and beyond. When the portugese crown got the profits they had made from their mining, they used it to rebuild Lisbon as it had been hit by an earthquake and tsunami. Mining in Brazil also led to the buildup of large cities much faster than the spreading of groups of people because the routes to the next city were so long and dangerous. The gold rush also financed the rise of Churches in all major cities and in Portugal. After the gold rush, capital was declining in gold, so Pombal set up monopoly in trading companies. Influenced by the United States gaining independence, people set up a constitutional republic in Minas Gerais, making slaves free with no compensation to the masters, as well as putting a moratoriam on debts to the crown. Some of the men, who were the richest in Minas Gerais, were killed for this and to this day are remembered for their efforts. The aftermath of this was a stronger church system than a military system. When slavery became illegal, migrants came over from other European countries, and this allowed farmers to wait until the next wave of free labor came. The interest in capital far surpassed the interest in the good of the public.
When the first ship arrived, it was Nicolau Coelho who went to the first beaches and saw the natives of this new land. He described them as fit and beautiful. They wore no clothes and were experts at hunting and gathering. They lived in communal huts, with a village holding about 300 to two thousand people. The metal tools that had been brought over fascinated these people, and it was obvious that the natives of these lands were not as evolved and were still living in the stone age. After only a week or so, Cabrals fleet left and sailed toward India. Later on though, the Portugese leaders sent another expedition of three ships to explore the coast of Brazil. When they got there the captain mistook the mouth of the bay for river, and named the place Rio de Janeiro, meaning river of January. They also found trees that resembled ones they had found in asia, called pau brasil, and the name stuck. It wasn’t until centuries later when the word brasileiro meant nationality, and not someone who was a woodcutter.
Unlike the British and Spanish colonies in the Americas, the Portugese remained friendly with their native Indians to the land. They lived with them, and some leaders ended up living as a native, enjoying the native lifestyle. Eventually when the French started to appear on the coast, the Portugese leader set up 15 colonies along the coast and lent them to other people. When that didn’t work the Portugese started setting up major cities to control the sugar and wood trade. The jarring thing that the Portugese found about the land and their native inhabitants, was the the Indians were cannibals, and so they were seen as devils. They also waged wars against any Indians who were not willing to convert to Christianity. Possibly the real threat to these Indians were in fact a spread of diseases brought over from Europe. When the Indians were gathered together, disease would spread quickly, wiping out a good portion of a group.
After settling in Sao Paolo, the first significant inland colony for the Portugese, much of the contact with Indians was to find more to bring back as slaves. The search for slaves and other things valuable like gold and silver, were called bandeiras, and these trips became a way of life for the portugese and mamelucos. Bandeirantes were crutial in the movement west in Brazil, setting the boundries much farther than the Treaty of Tordesillas had originally intended. The Jesuits also had a lot to do with this as they were the rivals of the Bandeirantes, so competition to get a lay of the land first was fruitful. In the 300 years since Cabral had set foot on the land, the Indians had been reduced to a population of about 600,000 people, and at about this time, Pombal set all Indians free of forced labour. Brazilians still use many tupi words today and learned many things about the land from the tupi. Many spices and flour, as well as the cleanliness and sexual candour that the Tupi had enjoyed, are still characteristic of Brazilians today.
Sugar was the main crop the portugese had started planting, receiving it from Asia. Between the 1570s and 1670s, and again today, Brazil was and is the largest exporter of sugar. Indians were initially used in the labourous process to convert the sugar cane, but eventually African slave trade became more popular here and in the rest of the Americas, though Brazil did not invent it. Slavery was practiced by the Greek and Romans, and in the sixteenth century, the Atlantic slave trade became an international commercial system. Sugar farming required large amounts of land, capital, fuel, and labour, so farming for this was hard work. The capital produced by these sugar plantations was only reached because of how quickly they could be up and running and productive. This was only possible with the labor of slaves. At one point, Brazil was importing more African slaves, and for longer periods of time, than any other country, which is why there is still a racial stipulation between blacks and lighter skinned people in Brazil. The reason transport of African slaves was so easy for Brazil, was because the distance travelled by sea was far shorter than any other European nation to the Americas. Slaves were also in high demand because the land could be very unforgiving at times, with some terrain uncrossable. Also pests and plagues regularly would kill off many farmers crops and livestock. One priest said that for the good deeds done by the slaves, they would see that the tables will turn in the afterlife.
When word got out that there was finally gold and diamonds discovered, people came from all over Brazil and beyond. When the portugese crown got the profits they had made from their mining, they used it to rebuild Lisbon as it had been hit by an earthquake and tsunami. Mining in Brazil also led to the buildup of large cities much faster than the spreading of groups of people because the routes to the next city were so long and dangerous. The gold rush also financed the rise of Churches in all major cities and in Portugal. After the gold rush, capital was declining in gold, so Pombal set up monopoly in trading companies. Influenced by the United States gaining independence, people set up a constitutional republic in Minas Gerais, making slaves free with no compensation to the masters, as well as putting a moratoriam on debts to the crown. Some of the men, who were the richest in Minas Gerais, were killed for this and to this day are remembered for their efforts. The aftermath of this was a stronger church system than a military system. When slavery became illegal, migrants came over from other European countries, and this allowed farmers to wait until the next wave of free labor came. The interest in capital far surpassed the interest in the good of the public.
Chapter 4
After Brazil had gained independence, there was no real sense of identity in the country. Rio was the major city at the time due to the coffee trade. The Portuguese had attempted to regain control of the land in the northeast and north, but were unable to be successful. Jose Bonifacio was considered the architect of Brazilian independence and is celebrated to this day. The ‘Cry of Ipiranga’ is celebrated as the day of independence in Brazil. Dom Pedro wrote the constitution of Brazil. The constituent assembly created by Dom Pedro was a 50-member senate, chosen by the Emperor, with 3 member lists elected in each province. There was also a 100-member chamber of deputies elected based on income. The Emperor appoints presidents of provinces as well as ministers and judges. He holds the power to veto legislation, to chose a 10 member council of state who advise him on his use of “moderating power” to dissolve parliament or appoint a new member of the cabinet. Pedro was known to appose slavery and fought against the constitution when it stated that all men are free in the country because there were still slaves. He eventually left Brazil, even when he said he never would, to be with his son, Pedro II, eventually dying when his son was only 9. His leaving of Brazil symbolized that there were no longer ties between Portugal and Brazil and that they had truly found independence. They were still however controlled by the monarchy. Pedro II became Monarch at just 15 years old. He was an attractive and very smart man from a very young age who loved to read and converse with scholars. He ruled for 50 years and was one of the most cultured rulers of Brazil ever. He was usually more informed than his ministers, a trait he shared with Dilma Rousseff. He was very loyal to his wife, and was a humble man, quoted as saying that he “would prefer to be a president of the Republic than an Emperor”. His father and Lula both feel that beurocracy slows the system. Pedro believed in a free pass. He was an advocate for schools and was one of the very few at the time in Brazil. Of the 12 million citizens of Brazil, 1 million could not read and two thousand were slaves. At the time, conservatism and liberalism were clashing. Conservatives believed only a strong central government would hold Brazil together and fend off resistance. Liberals believed that autonomy for provinces and municipalities would make the country stronger, as well as a locally commanded National Guard as a counterweight to the small imperial army.
10 million people voted in 1827, which was a very high politically active percent of the population. At the time, many compared Brazil to Victorian Britain, and the want for the best government brought out all political sides. Between 1822 and 1914, the population and economy both grew at the same rate of 1.5 %. Britain’s trade was keeping Brazils economy up because of the low tariff. Coffee cultivation also steadied during this time because of Cuba’s steam powered sugar mills. In 1812 sugar and cotton made up 49 percent of total exports with coffee at 19 percent, but by 1913, coffee had become 60 % of the total export with sugar and cotton at just 13 %. The biggest constraint on Brazils economic development was that there was no easy way to transport the goods around the country. This is because of the rugged terrain that is found virtually anywhere on Brazilian soil. Transport by train was still in the works, as the laying of tracks was very slow, mainly due to the terrain and lack of workers. Transport costs of coffee exceeded 1/3 of the coffees value. They knew that they needed railways but were unable to do so quickly. A satirical quote from a Brazilian movie states, “only with railways would Brazil evolve”. At first the tracks had very high rates because there was so little. By the 1850s however, Brazil went from Latin-Americans least tracked country to its most tracked country, in 40 years. Railways fro major cities, like Sao Paolo, to coffee plantations started opening up and tickets created revenue, with the transport of coffee being made easier as well.
Major slave trade in Brazil ended in 1843, though it was abolished in 1830 on British recommendation, when the Valongo, the main slave trade dock in Brazil, was destroyed. Slavery, however, continued underground. The British got fed up after they were lied to and started seizing slave ships and raiding Brazilian ports. Immigration increased tremendously after the fall of the monarchy, when between 1887 and 1914, 2.7 million immigrants came. 1/3 were Italian, and were treated very poorly. Italy outlawed immigration there, though many of the immigrants found success as family farmers, and in industry and commerce. In the first two decades of the 20th century, the Spaniards became the most immigrated country. War for the southern border of Brazil between Brazil, Uruguay, and Paraguay broke out, and Paraguay was devastated. The Battle for overall power continued at this time. Sugar and cotton trade continued to decline, and coffee rose and fell with the world demand for coffee. Artists, theater figures, and Aristocrats were the well-known leaders of the modernist movement that dominates Brazil for the next half a century. Modernism was “Aristocratic in Spirit” as Mario de Andrade stated. It has little to say about democracy. The Brazilian Population tripled between 1872 and 1920 to 30.6 million people. Agriculture dominated the economy but created the conditions for industrial development. The 1920 consensus found that less than 25% of the population was literate. Fraud in the electoral system created strikes, which lead to workers rights. In 1924 the tenentes staged rebellions over the weak army and weak central state. An editorial in a journal stated the army should “be prepared to correct internal disturbances that are so frequent in the tumultuous life of developing countries. Still there is a very big difference in the strength of the economy at this time between the northeast and south east, though coffee valorization helped to decrease inflation. The first republic broke down with the alliance between Sao Paolo and Minas Gerais. Julio Prestes was recommended as presidential candidate by Sousa, which is highly regarded as not normal. When Prestes won there was backlash as the election was said to have been rigged. The first republic therefore started and ended as a military coup
10 million people voted in 1827, which was a very high politically active percent of the population. At the time, many compared Brazil to Victorian Britain, and the want for the best government brought out all political sides. Between 1822 and 1914, the population and economy both grew at the same rate of 1.5 %. Britain’s trade was keeping Brazils economy up because of the low tariff. Coffee cultivation also steadied during this time because of Cuba’s steam powered sugar mills. In 1812 sugar and cotton made up 49 percent of total exports with coffee at 19 percent, but by 1913, coffee had become 60 % of the total export with sugar and cotton at just 13 %. The biggest constraint on Brazils economic development was that there was no easy way to transport the goods around the country. This is because of the rugged terrain that is found virtually anywhere on Brazilian soil. Transport by train was still in the works, as the laying of tracks was very slow, mainly due to the terrain and lack of workers. Transport costs of coffee exceeded 1/3 of the coffees value. They knew that they needed railways but were unable to do so quickly. A satirical quote from a Brazilian movie states, “only with railways would Brazil evolve”. At first the tracks had very high rates because there was so little. By the 1850s however, Brazil went from Latin-Americans least tracked country to its most tracked country, in 40 years. Railways fro major cities, like Sao Paolo, to coffee plantations started opening up and tickets created revenue, with the transport of coffee being made easier as well.
Major slave trade in Brazil ended in 1843, though it was abolished in 1830 on British recommendation, when the Valongo, the main slave trade dock in Brazil, was destroyed. Slavery, however, continued underground. The British got fed up after they were lied to and started seizing slave ships and raiding Brazilian ports. Immigration increased tremendously after the fall of the monarchy, when between 1887 and 1914, 2.7 million immigrants came. 1/3 were Italian, and were treated very poorly. Italy outlawed immigration there, though many of the immigrants found success as family farmers, and in industry and commerce. In the first two decades of the 20th century, the Spaniards became the most immigrated country. War for the southern border of Brazil between Brazil, Uruguay, and Paraguay broke out, and Paraguay was devastated. The Battle for overall power continued at this time. Sugar and cotton trade continued to decline, and coffee rose and fell with the world demand for coffee. Artists, theater figures, and Aristocrats were the well-known leaders of the modernist movement that dominates Brazil for the next half a century. Modernism was “Aristocratic in Spirit” as Mario de Andrade stated. It has little to say about democracy. The Brazilian Population tripled between 1872 and 1920 to 30.6 million people. Agriculture dominated the economy but created the conditions for industrial development. The 1920 consensus found that less than 25% of the population was literate. Fraud in the electoral system created strikes, which lead to workers rights. In 1924 the tenentes staged rebellions over the weak army and weak central state. An editorial in a journal stated the army should “be prepared to correct internal disturbances that are so frequent in the tumultuous life of developing countries. Still there is a very big difference in the strength of the economy at this time between the northeast and south east, though coffee valorization helped to decrease inflation. The first republic broke down with the alliance between Sao Paolo and Minas Gerais. Julio Prestes was recommended as presidential candidate by Sousa, which is highly regarded as not normal. When Prestes won there was backlash as the election was said to have been rigged. The first republic therefore started and ended as a military coup
Finding a Government
Gutelio Vargas governed Brazil for Eighteen years. He can claim more than any other leader of Brazil, that he created a nation-state there. He was a conservative who went on to create the Labour Party. He was an industrialist, and did little to help the obvious inequality between people in his country, largely due to color and income, but for some reason he was dubbed ‘father of the poor’. He was the founder of modern Brazilian nationalism but wasn’t hostile to foreign capitalism, and cared much for his home state Gaucho. He flirted with fascism yet sent Brazilian troops to fight with the allies in the second world war. A charismatic leader but not physically imposing, Vargas was a pragmatic authoritarian, for whom ideology was subordinate to his exercise of power. Born on his fathers ranch in a small farming town 30 km from Sao Borja, he grew up the son of a Paraguayan war veteran, and though he dabbled in war himself, he opted to stay in his home state and become a politician. Vargas strong and overriding goal as president was to develop a strong, centralized state, along with which came a strong federal army. His first move as head of provisional government was to abolish the 1889 constitution and its state counterparts. The dissolved congress along with state and municipal assemblies were replaced with federal appointees, many were former terentes. Vargas created two ministries, one of labor and industry, and commerce, and one of education and public wealth. This government was more interventionist in economic policy, largely due to the Wall Street crash, which caused coups in 7 Latin American countries. The crash marked the end of the oligarchical constitutionalism in the region.
Coffee prices fell to a third of what they were 10 years earlier and foreign trade collapsed between 1928 and 1932. Imports fell by ¾ and exports by more than 3/5. Brazil suffered what economists call a sudden stop in capital inflows. It ran out of foreign exchange and halted capital repayments on its foreign debt. In a desperate effort to spike coffee prices, they bought and destroyed 78 million bags of coffee, which was a world supply for 3 years at the time. Due to new laws on voting rights and electoral process by Vargas, there was a rebellion in Sao Paolo. This civil war was larger than any other in Brazilian history, lasting three months and involving heavy artillery, and infantry advances. Sao Paolo was defeated with 600 deaths accounted. Vargas went ahead with the constituent assembly, which was similar to the 1891 document guaranteeing civil rights and state autonomy. Vargas document created new parties in loyal states to the government. The constitution was surprisingly liberal and introduces national ownership of mineral rights. Minimum wage was raised and free and compulsory schooling was put into place. Vargas, who was elected to a 4-year term with no reelection was surprised and unaware that he would be bound to this. Communist attempts to overthrow the government would be handled, and when Vargas term was up, the federal government decided they were setting up the first nation state in Brazil. The Estado Novo was set up, with the personal dictatorship of a civilian position, was maintained by the military. The military, between the years 1927 and 1940, grew exponentially. The second defining feature of the Estado Novo was corporatism. Corporatism was like positivism in that it was a response to emerging industrial society and a reaction to individualism and Marxism. It was held that the state should organize society as a community, maintaining the interest of capital and labor. Strikes were made illegal, and labor courts were set up to handle disputes. Vargas sought to detach the idea of progress from that of individual freedom. He began to make weekly radio broadcasts in an effort to gain popularity. The main difference between Vargas’s rule and that of European Fascism however, is that he maintained the idea that Brazilian nationality is the product of racial mixing, and that it makes up their nationalism. A stew of pork and beans that was invented in the slave quarters was made their national dish to prove this. Samba and afro-Brazilian dances were the emotional bond between rural Brazil and Vargas. Vargas declared presidential and congressional elections in 1945 and launched two parties. One was the Partido Social Democratico, which brought together the official political machines and professional politicians in the states, and was backed by industrialists and landowners. The Partido Trabalhisa Brasileiro was inspired by the British labor party, and was based on the official unions and political apparatus of the labor ministry. Both parties were to pick military officers as their candidates. Vargas’s unclear intentions lead to his resignation n 1945 and was army enforced. General Dutra won the election, and was embarking on the “experiment in democracy, as Thomas Skidmore had called it. He ruled with limited democracy, though less limited than the first republic. Illiterates were still denied votes, included were most of the poor. Registered voters reached more than half the adult population by 1962. Vargas was now in charge of the PTB, but failed due to his populist discourse, only to blame the simple colony ideas of the agents of international finance. In office, Vargas pushed state led industrialization. He started with two institutions that still play a role in Brazilian economy today. The first was the National Development Bank, and the second the National Oil Company, or Petrobras. The latter was in response to a broad national campaign that was granted with monopoly over exploitation and development. Vargas shot himself after being pressed to resign following an assassination attempt of his foe in the UDN. His suicide note was a testament of pure populist nationalism. Powerful foreign and national interests brought him down because of his defense of the workers. The Brazilian public mourned his death, mainly because he helped the poor the most.
Juscelino Kubitschek of PSD won the 1955 election and was considered an heir of Vargas. Born in diamantine, in Minas Gerais, he was the son of a teacher and a muleteer. His town had no sewage, lights, or clean water. He qualified as a doctor in Minas military police, and became governor of Belo Horizonte, where he built Pampulha. As governor he focused on building roads, hydroelectric dams, and his presidency marked a magic moment of economic growth, political democracy, and cultural flowering. He obtained political support through small beurocratic favors, and used these skills to strengthen his initially weak mandate. Government policies came to be known as national Developmentalism. Foreign firms were given incentives to import machinery due to Kubitschek’s policies. He created a car industry here from scratch with one hundred thousand vehicles made by 1967. He created the new capital of Brazil, Brasilia, on the central plateau. The 1891 constitution had required the government set aside a plot of land in the Planalto for the new capital. Kibitschek argued that Brasilia would change national integration, ending the habit of Brazilians clinging to the shores. It would give politicians a broader view of Brazil as a whole, and it would act as a crossroads between the new capital and Belem and Acre. The idea to create a new capital was seen as a declaration of National Ambition. Kubitschek inaugurated Brasilia as the new capital in April of 1960. The city had mixed reviews from the start and was just seen as a positivist project that would remove people from a seat of power. It was an expensive project and some Brazilians say they suffered 50 years of inflation in just 5 years.
Brazil won its first World Cup in 1958, largely due to the contributions of a young Pele. Janio Quadros won the 1960 presidential election. He had no experience and even his vice president was an opponent. He quickly resigned and his resignation triggered political crisis, which again threatened civil war. Economic growth in the country stopped and inflation rose as left and right parties clashed for power. Goulart tired to gain control but couldn’t. A coup backed by governors of 3 states, as well as the United States, was successful, and it was decided that Brazil could not function under a democratic government.
Coffee prices fell to a third of what they were 10 years earlier and foreign trade collapsed between 1928 and 1932. Imports fell by ¾ and exports by more than 3/5. Brazil suffered what economists call a sudden stop in capital inflows. It ran out of foreign exchange and halted capital repayments on its foreign debt. In a desperate effort to spike coffee prices, they bought and destroyed 78 million bags of coffee, which was a world supply for 3 years at the time. Due to new laws on voting rights and electoral process by Vargas, there was a rebellion in Sao Paolo. This civil war was larger than any other in Brazilian history, lasting three months and involving heavy artillery, and infantry advances. Sao Paolo was defeated with 600 deaths accounted. Vargas went ahead with the constituent assembly, which was similar to the 1891 document guaranteeing civil rights and state autonomy. Vargas document created new parties in loyal states to the government. The constitution was surprisingly liberal and introduces national ownership of mineral rights. Minimum wage was raised and free and compulsory schooling was put into place. Vargas, who was elected to a 4-year term with no reelection was surprised and unaware that he would be bound to this. Communist attempts to overthrow the government would be handled, and when Vargas term was up, the federal government decided they were setting up the first nation state in Brazil. The Estado Novo was set up, with the personal dictatorship of a civilian position, was maintained by the military. The military, between the years 1927 and 1940, grew exponentially. The second defining feature of the Estado Novo was corporatism. Corporatism was like positivism in that it was a response to emerging industrial society and a reaction to individualism and Marxism. It was held that the state should organize society as a community, maintaining the interest of capital and labor. Strikes were made illegal, and labor courts were set up to handle disputes. Vargas sought to detach the idea of progress from that of individual freedom. He began to make weekly radio broadcasts in an effort to gain popularity. The main difference between Vargas’s rule and that of European Fascism however, is that he maintained the idea that Brazilian nationality is the product of racial mixing, and that it makes up their nationalism. A stew of pork and beans that was invented in the slave quarters was made their national dish to prove this. Samba and afro-Brazilian dances were the emotional bond between rural Brazil and Vargas. Vargas declared presidential and congressional elections in 1945 and launched two parties. One was the Partido Social Democratico, which brought together the official political machines and professional politicians in the states, and was backed by industrialists and landowners. The Partido Trabalhisa Brasileiro was inspired by the British labor party, and was based on the official unions and political apparatus of the labor ministry. Both parties were to pick military officers as their candidates. Vargas’s unclear intentions lead to his resignation n 1945 and was army enforced. General Dutra won the election, and was embarking on the “experiment in democracy, as Thomas Skidmore had called it. He ruled with limited democracy, though less limited than the first republic. Illiterates were still denied votes, included were most of the poor. Registered voters reached more than half the adult population by 1962. Vargas was now in charge of the PTB, but failed due to his populist discourse, only to blame the simple colony ideas of the agents of international finance. In office, Vargas pushed state led industrialization. He started with two institutions that still play a role in Brazilian economy today. The first was the National Development Bank, and the second the National Oil Company, or Petrobras. The latter was in response to a broad national campaign that was granted with monopoly over exploitation and development. Vargas shot himself after being pressed to resign following an assassination attempt of his foe in the UDN. His suicide note was a testament of pure populist nationalism. Powerful foreign and national interests brought him down because of his defense of the workers. The Brazilian public mourned his death, mainly because he helped the poor the most.
Juscelino Kubitschek of PSD won the 1955 election and was considered an heir of Vargas. Born in diamantine, in Minas Gerais, he was the son of a teacher and a muleteer. His town had no sewage, lights, or clean water. He qualified as a doctor in Minas military police, and became governor of Belo Horizonte, where he built Pampulha. As governor he focused on building roads, hydroelectric dams, and his presidency marked a magic moment of economic growth, political democracy, and cultural flowering. He obtained political support through small beurocratic favors, and used these skills to strengthen his initially weak mandate. Government policies came to be known as national Developmentalism. Foreign firms were given incentives to import machinery due to Kubitschek’s policies. He created a car industry here from scratch with one hundred thousand vehicles made by 1967. He created the new capital of Brazil, Brasilia, on the central plateau. The 1891 constitution had required the government set aside a plot of land in the Planalto for the new capital. Kibitschek argued that Brasilia would change national integration, ending the habit of Brazilians clinging to the shores. It would give politicians a broader view of Brazil as a whole, and it would act as a crossroads between the new capital and Belem and Acre. The idea to create a new capital was seen as a declaration of National Ambition. Kubitschek inaugurated Brasilia as the new capital in April of 1960. The city had mixed reviews from the start and was just seen as a positivist project that would remove people from a seat of power. It was an expensive project and some Brazilians say they suffered 50 years of inflation in just 5 years.
Brazil won its first World Cup in 1958, largely due to the contributions of a young Pele. Janio Quadros won the 1960 presidential election. He had no experience and even his vice president was an opponent. He quickly resigned and his resignation triggered political crisis, which again threatened civil war. Economic growth in the country stopped and inflation rose as left and right parties clashed for power. Goulart tired to gain control but couldn’t. A coup backed by governors of 3 states, as well as the United States, was successful, and it was decided that Brazil could not function under a democratic government.
Chapter 6
In this chapter the book talks about the struggles that Brazil has with democracy, once again. Civilians felt that the armed forces were exercising their moderating power, but these armed forces ended up controlling the country for the next 21 years. The armed forces chose to exercise power because they felt it would purge their country of communism. Castelo Branco was chosen to lead the country, and his followers were called moderates. They were anticommunist but believed in constitutional order, wanting to purify democracy. The second group gaining traction at this time were known as hardliners, and gravitated toward Arthur da Costa e Silva. They favored greater repression and were generally more nationalist when it came to the economy.
Brazils military dictatorship was different from that of other countries in Latin America as it maintained the illusion of constitutional rule. The dictatorship deepened its rule of the country by implementing Institutional acts, which allowed the president to purge the congress. Leftists were arrested and many people who held positions within the government lost their jobs. The president issued AI-2, which was a law that created two new political parties and got rid of the old ones. The new ones were comprised of people who were pro-government and people who were part of the opposition. Castelo Branco also gave control of economic policy to two civilian technocrats. They actually stabilized the economy and it went up by 5 percent in 1966 and inflation fell drastically.
In 1968 the government faced an upsurge in opposition as strikes broke out in Sao Paolo and Belo Horizonte. Communist groups started to rise also at this time, getting funding by robbing banks. ARENA won the congressional election and the idea that Brazil was entering the developed world was very popular. Ernesto Geisel became Medicis successor and was head of the Petrobras. He was interested in achieving a gradual and controlled return of democracy in the nation. Giesel chose to get rid of army officers that he saw were not doing their job correctly or were doing things unlawfully.
In 1982 45 million Brazilians showed up to vote for congress and governors. Golbery implemented new laws of political parties, which dissolved ARENA and the MDB, though they reformed under new names. Abertura, and economic struggles in the country had caused a civil society to stir up. The most dramatic show of this was through labor unrests, where in 1978, about 500,000 workers, most of which worked at car plants, went on strike. Union leaders who wanted union autonomy as well as the right to strike, and free collective bargaining organized the strikes. The strikes turned their prominent leader, Luiz Inacio Lula da Silva into a national figure.
Brazils military dictatorship was different from that of other countries in Latin America as it maintained the illusion of constitutional rule. The dictatorship deepened its rule of the country by implementing Institutional acts, which allowed the president to purge the congress. Leftists were arrested and many people who held positions within the government lost their jobs. The president issued AI-2, which was a law that created two new political parties and got rid of the old ones. The new ones were comprised of people who were pro-government and people who were part of the opposition. Castelo Branco also gave control of economic policy to two civilian technocrats. They actually stabilized the economy and it went up by 5 percent in 1966 and inflation fell drastically.
In 1968 the government faced an upsurge in opposition as strikes broke out in Sao Paolo and Belo Horizonte. Communist groups started to rise also at this time, getting funding by robbing banks. ARENA won the congressional election and the idea that Brazil was entering the developed world was very popular. Ernesto Geisel became Medicis successor and was head of the Petrobras. He was interested in achieving a gradual and controlled return of democracy in the nation. Giesel chose to get rid of army officers that he saw were not doing their job correctly or were doing things unlawfully.
In 1982 45 million Brazilians showed up to vote for congress and governors. Golbery implemented new laws of political parties, which dissolved ARENA and the MDB, though they reformed under new names. Abertura, and economic struggles in the country had caused a civil society to stir up. The most dramatic show of this was through labor unrests, where in 1978, about 500,000 workers, most of which worked at car plants, went on strike. Union leaders who wanted union autonomy as well as the right to strike, and free collective bargaining organized the strikes. The strikes turned their prominent leader, Luiz Inacio Lula da Silva into a national figure.
Chapter 7
In 1991, Brazil was the most pessimistic country in the world, which was odd because they are generally known as the happiest country. At this time, people were living only for themselves and did not care about others. In 1994, Aryton Senna died in a crash during a race he was in, and this caused heavy grievances by the Brazilian public. The new Republic, as the politicians called it, was the restored democracy. It faced three main tasks, to dismantle the remains of Dictatorship and provide effective democratic government. They were to conquer inflation and secure a return to economic growth, and address the countries deeply rotted social problems. The struggles the New Republic faced in doing so were ample. The first president died and the second was impeached. Inflation rose and the economy floundered, as well Tancredo Neves died. Sarneys main achievement was to see full democratization and a new constitution. He got a bill approved to the 1967 constitution allowing illiterates to vote, which formed ¼ of the population at the time. He also legalized all political parties. Elections for congress and governors in 1987 were base on universal suffrage for the first time in Brazilian history. Because of Sarneys success in anti-inflammatory plans, the PMDB won by majority vote in both houses of congress and all but one state governorship. Neves insisted that the new constitution be drawn up by congress. This new constitution closely resembled the US constitution. It allowed illiterates and those 16 or older the right to vote. It expanded welfare state and reduced inequality, as well as recognized the rights of Indians to lands that they traditionally occupy. This new constitution was also unsurprisingly flawed. Drafters rejected any rules that might impose party discipline on legislators. It maintained the same electoral system that was set in place in the 1946 constitution and entrenched the failing economic model of National Developmentalism. Few were satisfied with the final document and Sarney complained that it would make Brazil ungovernable. By 2011, the constitution had added 67 amendments, which in comparison to the US, who only added 27 since it was first signed, including bill of rights, was very high.
Alagoas is a town that had a declining sugar industry at this time. It had a history or tradition of clienteles, social neglect, and political violence. In 1986, 42% of Alagoans were unemployed, 65% were illiterate, and the infant mortality rate doubled the national average. In 1989 Brazil finally had the chance to choose their president, which had not been done since Quadros in 1960. Cardoso Covas was the candidate for the Party of Brazilian Social Democracy. He complained that the corporate state was spending money that they did not have and that Brazil needed a shock of free initiative. His campaign was slow to take off. Collar therefore won the election as a paradoxical figure, which posed as a progressive reformer. His exercise of power was cynical and he proved to be very corrupt. He arrogantly disdained congress and did nothing to fight inflation, which lead to his demise. He froze Brazilian savings, which personally affected many of its citizens. Though at first these plans were well received, the economy went into a recession. At the same time collar had his campaign treasurer, Faria, using the money saved to upgrade his mansion and pay off debts. Faria fled to Thailand when he was found out and later died with his lover. Collars saga ended and the vice president Itamar Franco took office. He would not have been the voters first choice, but he did better than Sarney as he formed a broad-based coalition government. Inflation was often associated with populism at this time. The roots of inflation were so deeply tangled in the countries history, which caused the reform to take so long. Neo-structuralists named the problem after Brazils economy, saying that it was highly monopolized, and that when demands for products fell, firms could raise prices to preserve their profit margins. The new republics first effort to attack inflation was the Cruzado Plan. This plan involved a price freeze, causing inflation to fall to zero, but then consumption boomed and shortages occurred. The plan fell apart and inflation rose again, and this process repeated 5 times in the 6 years that followed.
Cardoso recruited a team of economists, who were very smart, to devise a politically coherent plan. This plan included a new currency called the real, cutting the fiscal deficit of 8% of GDP, and adopting the idea of a virtual currency, giving gradual de-indexation of economy without contaminating the new ‘real’. The URV, as they called this virtual currency, had sucked indexation out of the economy at last and the Real Plan had immense significance in the conquest of inflation. Fernando Enrique Cardoso was a president the Brazilians were finally proud of. Upon taking office, his task was to consolidate the early success of the real and to modernize the economy. He wanted “social justice”. At the end of his term, low inflation and economic stability were his historical conquests. He did however have some critics. The over reliance on the real and fiscal laxity in the first term really hit Brazil hard. Economic growth only averaged 2.3% a year, though this was partly due to lack of demand of Brazilian goods, and unemployment rose. Lula claims Cardoso is a neo-lberal, and Cardoso feels he only “gave greater consistencies to public policy. Cardoso gave Brazil rumo, though congressional delays gave doubt to this, and he also paved the way for Lulas presidency.
Alagoas is a town that had a declining sugar industry at this time. It had a history or tradition of clienteles, social neglect, and political violence. In 1986, 42% of Alagoans were unemployed, 65% were illiterate, and the infant mortality rate doubled the national average. In 1989 Brazil finally had the chance to choose their president, which had not been done since Quadros in 1960. Cardoso Covas was the candidate for the Party of Brazilian Social Democracy. He complained that the corporate state was spending money that they did not have and that Brazil needed a shock of free initiative. His campaign was slow to take off. Collar therefore won the election as a paradoxical figure, which posed as a progressive reformer. His exercise of power was cynical and he proved to be very corrupt. He arrogantly disdained congress and did nothing to fight inflation, which lead to his demise. He froze Brazilian savings, which personally affected many of its citizens. Though at first these plans were well received, the economy went into a recession. At the same time collar had his campaign treasurer, Faria, using the money saved to upgrade his mansion and pay off debts. Faria fled to Thailand when he was found out and later died with his lover. Collars saga ended and the vice president Itamar Franco took office. He would not have been the voters first choice, but he did better than Sarney as he formed a broad-based coalition government. Inflation was often associated with populism at this time. The roots of inflation were so deeply tangled in the countries history, which caused the reform to take so long. Neo-structuralists named the problem after Brazils economy, saying that it was highly monopolized, and that when demands for products fell, firms could raise prices to preserve their profit margins. The new republics first effort to attack inflation was the Cruzado Plan. This plan involved a price freeze, causing inflation to fall to zero, but then consumption boomed and shortages occurred. The plan fell apart and inflation rose again, and this process repeated 5 times in the 6 years that followed.
Cardoso recruited a team of economists, who were very smart, to devise a politically coherent plan. This plan included a new currency called the real, cutting the fiscal deficit of 8% of GDP, and adopting the idea of a virtual currency, giving gradual de-indexation of economy without contaminating the new ‘real’. The URV, as they called this virtual currency, had sucked indexation out of the economy at last and the Real Plan had immense significance in the conquest of inflation. Fernando Enrique Cardoso was a president the Brazilians were finally proud of. Upon taking office, his task was to consolidate the early success of the real and to modernize the economy. He wanted “social justice”. At the end of his term, low inflation and economic stability were his historical conquests. He did however have some critics. The over reliance on the real and fiscal laxity in the first term really hit Brazil hard. Economic growth only averaged 2.3% a year, though this was partly due to lack of demand of Brazilian goods, and unemployment rose. Lula claims Cardoso is a neo-lberal, and Cardoso feels he only “gave greater consistencies to public policy. Cardoso gave Brazil rumo, though congressional delays gave doubt to this, and he also paved the way for Lulas presidency.
Chapter 8
On Feburary 10, 1980, 1200 people gathered at Colegio sion to found the new political party Partido dos Trabalhadores, or ‘workers party’. Unleashed by the decadence of the military regime, strikes by car factory workers in 1978 and 1979. The product of a lot of debate, mainly Cardoso saying the left should work within the MDB to turn the party into a broad, multiclass progressive movement. Three groups came together with the aid of union leaders to create the PT. Another group of leftist intellectuals and students formed, then dissolved. The PT became Latin Americas biggest and most original left wing party. Many of its intellectuals saw the PT as an expression of Radical and egalitarian democracy, and it was almost the only political party organized from below the state rather than from within it. Raymoundo Faoro said accurately that the PT would survive the fall of the Berlin wall because it was the repository of the demand for social injustice in a country where the elite “lacks all sense of social responsibility”. There were still problems with the PT’s attitudes. Economic policy was very statist, and current and retired public sector workers were a pillar of the corporate state. Roberto Damatta says the PT, ‘like Vargas, does not see individuals, but only gives importance to collective categories and corporate forms of government. Lulas defeat in 1989 gave reason to Brazilian people to believe the PT could win with a far left platform. This election was just after the New Republic failed and the economy suffered. Lula became more moderate, but his parties outdated state socialism ideals doomed him in the next two elections in 1994 and 1998 to Cardoso. Cardoso lost popularity because of the stop-go economy, as well unemployment replaced inflation as Brazils biggest worry.
Lula took this time to make his image one that Brazilians could look up to. He represented himself as a migrant from the NE who worked his way out of poverty on his own efforts, rather than a strike leader. Lulas campaign was a moderate one, in which he omitted references to socialism or reversing privatization, and endorsed agribusiness and agrarian reform. He did not want to renegotiate public debt, as it was mainly not foreign, but owned by Braziian investors and pension funds. Lulas final step to the center was when he issued a letter to the Brazilian people, where he made his peace with the Real Plan and Cardoso reforms. He claimed “stability and control of the public accounts and of inflation are today the patrimony of all Brazilians. The letter caused a panic among financial investors who went into self fulfilling panic. The Real in turn plunged below three of the dollar, and jacked up interest rates by the central bank did not help. This all raised fears that the public debt would become unpayable, already at 350 billion. This then caused what economists call a sudden stop in capital inflows, with nervous foreign banks taking back their credit and investors dumping Brazilian assets. The government negotiated an IMF loan to stop attacks on the real and finance Brazils account defecit. Lula supported the economic program under Cardosos recommedations, and he won the election not surprisingly. Michael Reid wrote in an article before the election that Lulas election was the most significant achievement for the democratic far left since Chiles in 1970, which had better circumstances. This in turn demolished the idea that Latin American democracy was still just a rigged game for the better off.
Lula has very sharp political instincts and great empathy for ordinary Brazilians. He often said that as the first manual worker to become president, “he could not afford to fail”. ‘We can do much more’ said the founder of the workers party and former lathe operater and peanut salesmen turned president. There was an enormous symbolic significance tohis inauguration as most Brazilians can relate to him as well as the fact that it solidified the idea that Brazil was a democracy. Lula called for 6 reforms, one on pensions, tax, labor, the political system, land, and the financial system. The PT did not favor most. Lulas first set out a tightening of fiscal policy in order to stabilize debt, and micro economical reforms soon followed. Lulas government had initial troubles with social policy, as Cardosos government did little to help the issue. At this time the PT also had a scandal going on where the treasurer was making cash payments to members of congress for their votes. Waves of backlash from mensalao threatened to sink Lula. Duda medonca, the PR guru for mensalao revealed he was paid 15.5 million reis of his work for Lulas campaign, all under the table and 10.5 million from foreign accounts, which is a crime against electoral law. Lula said he felt ‘betrayed by unacceptable practices of which I have no knowledge. Some wanted Lula to resign, and PSDB were confident that they could beat Lula, but also lacked the votes to impeach him. Lula won 61% of the vote in the election in the final months of his first term, the governor made trips around Brazil and abroad, the economy was brightening, and the government made a big increase in minimum wage. What allowed him to gain a statist economic policy in his second term was the economy grew, current account was in surplus, the real appreciated steadily, and investors began to trust Lulas brazil. After this wages and employment increased and there was a boom in consumption. The collapse of the Lehman brothers in 2008 hurt Brazilian economy, though Lula said it wouldn’t, and as a result finance lines for exports and imiports in Brazil were cancelled. Usually they just roll over but they didn’t. The resistance they showed to this financial crisis proved their economic strength. The lesson was that Liberal Capitalism failed and the future is state capitalism. Along with increasing minium wasge, and a permanent increase in public spending, Lulas need to be successful allowed the government slow withdrawal of fiscal stimulus. Lula made Dilma Rousseff his candidate for the next election, and she was the first woman nomination in Brazilian history. Lula called Dilma the mother of the PAC, and when people found that Lulas appointed successor was Dilma, her status in the polls rose quickly. Her image as a survivor of Lymphatic cancer proved her a fighter. Lula was again a political hero, and Marina Silvas showed in the election that she was a force as well, slowing deforestation and calling out corruption. The traditional middle class did not benefit much from the Lula years though, and there could be a vast difference in attitudes toward him from the poor to the middle class. The middle class felt that “everyone was better off except me”, as well roads became jammed, and there were worries about sustainability spending. The poor however loved him because things were getting better and they wanted their kids to have a better life than them. Lulas dream for the next government is to take stes toward making the poorest rise to the lower middle class and then the middle middle class. Better access to health, education, and material goods are also goals.
Dilma Rousseff came from a middle class backround. She lived in Porto Alegre with her partner who was in jail, when she got her economics degree and then went for post graduate studies in economics which she didn’t complete. She was switching to PT when Brizola broke the local alliance, and at this job she got Lulas attention. She also got natural gas for local businesses, saving the Rio Grande do Sul from national electricity blackouts. She was a strong and powerful woman and a feminist. She was respected for her administrative ability, grasp of detail, honesty, and work ethic. She went behind ministers backs to speak directly with people whom she felt were more competent. She was more idealogical than Lula, and called herself a Brazilian Democratic Socialist. She was known for only changing her mind when in reality she had errored, but was respected by those who worked with her to be a fair but tough negotiator. In her presidency, her goal was to consolidate Lulas achievements, while stepping out of his shadow. Initially this went well, claiming Brazil should become ‘one of the most developed and least unequal nations in the world. She pledged to extradite extreme poverty, and maintain economic stability ‘as a basic value’. In the first ear she fired 7 ministers, though some would call her start cautious. The reality that the cycle of faster economic growth that came with the real plan had run its course. Credit wasn’t growing as fast, people bought things that they couldn’t afford, and manufacturers in Brazil had foreign competition because of Chinas decelerating economy. Dilma received a 70% rating in her first 30 months in office. She had no tolerance for corruption, and the record levverl of unemployment and rising wages made her well like in the middle class. Brazilian politicians say though, that she just made problems and solved none of them.
Lula took this time to make his image one that Brazilians could look up to. He represented himself as a migrant from the NE who worked his way out of poverty on his own efforts, rather than a strike leader. Lulas campaign was a moderate one, in which he omitted references to socialism or reversing privatization, and endorsed agribusiness and agrarian reform. He did not want to renegotiate public debt, as it was mainly not foreign, but owned by Braziian investors and pension funds. Lulas final step to the center was when he issued a letter to the Brazilian people, where he made his peace with the Real Plan and Cardoso reforms. He claimed “stability and control of the public accounts and of inflation are today the patrimony of all Brazilians. The letter caused a panic among financial investors who went into self fulfilling panic. The Real in turn plunged below three of the dollar, and jacked up interest rates by the central bank did not help. This all raised fears that the public debt would become unpayable, already at 350 billion. This then caused what economists call a sudden stop in capital inflows, with nervous foreign banks taking back their credit and investors dumping Brazilian assets. The government negotiated an IMF loan to stop attacks on the real and finance Brazils account defecit. Lula supported the economic program under Cardosos recommedations, and he won the election not surprisingly. Michael Reid wrote in an article before the election that Lulas election was the most significant achievement for the democratic far left since Chiles in 1970, which had better circumstances. This in turn demolished the idea that Latin American democracy was still just a rigged game for the better off.
Lula has very sharp political instincts and great empathy for ordinary Brazilians. He often said that as the first manual worker to become president, “he could not afford to fail”. ‘We can do much more’ said the founder of the workers party and former lathe operater and peanut salesmen turned president. There was an enormous symbolic significance tohis inauguration as most Brazilians can relate to him as well as the fact that it solidified the idea that Brazil was a democracy. Lula called for 6 reforms, one on pensions, tax, labor, the political system, land, and the financial system. The PT did not favor most. Lulas first set out a tightening of fiscal policy in order to stabilize debt, and micro economical reforms soon followed. Lulas government had initial troubles with social policy, as Cardosos government did little to help the issue. At this time the PT also had a scandal going on where the treasurer was making cash payments to members of congress for their votes. Waves of backlash from mensalao threatened to sink Lula. Duda medonca, the PR guru for mensalao revealed he was paid 15.5 million reis of his work for Lulas campaign, all under the table and 10.5 million from foreign accounts, which is a crime against electoral law. Lula said he felt ‘betrayed by unacceptable practices of which I have no knowledge. Some wanted Lula to resign, and PSDB were confident that they could beat Lula, but also lacked the votes to impeach him. Lula won 61% of the vote in the election in the final months of his first term, the governor made trips around Brazil and abroad, the economy was brightening, and the government made a big increase in minimum wage. What allowed him to gain a statist economic policy in his second term was the economy grew, current account was in surplus, the real appreciated steadily, and investors began to trust Lulas brazil. After this wages and employment increased and there was a boom in consumption. The collapse of the Lehman brothers in 2008 hurt Brazilian economy, though Lula said it wouldn’t, and as a result finance lines for exports and imiports in Brazil were cancelled. Usually they just roll over but they didn’t. The resistance they showed to this financial crisis proved their economic strength. The lesson was that Liberal Capitalism failed and the future is state capitalism. Along with increasing minium wasge, and a permanent increase in public spending, Lulas need to be successful allowed the government slow withdrawal of fiscal stimulus. Lula made Dilma Rousseff his candidate for the next election, and she was the first woman nomination in Brazilian history. Lula called Dilma the mother of the PAC, and when people found that Lulas appointed successor was Dilma, her status in the polls rose quickly. Her image as a survivor of Lymphatic cancer proved her a fighter. Lula was again a political hero, and Marina Silvas showed in the election that she was a force as well, slowing deforestation and calling out corruption. The traditional middle class did not benefit much from the Lula years though, and there could be a vast difference in attitudes toward him from the poor to the middle class. The middle class felt that “everyone was better off except me”, as well roads became jammed, and there were worries about sustainability spending. The poor however loved him because things were getting better and they wanted their kids to have a better life than them. Lulas dream for the next government is to take stes toward making the poorest rise to the lower middle class and then the middle middle class. Better access to health, education, and material goods are also goals.
Dilma Rousseff came from a middle class backround. She lived in Porto Alegre with her partner who was in jail, when she got her economics degree and then went for post graduate studies in economics which she didn’t complete. She was switching to PT when Brizola broke the local alliance, and at this job she got Lulas attention. She also got natural gas for local businesses, saving the Rio Grande do Sul from national electricity blackouts. She was a strong and powerful woman and a feminist. She was respected for her administrative ability, grasp of detail, honesty, and work ethic. She went behind ministers backs to speak directly with people whom she felt were more competent. She was more idealogical than Lula, and called herself a Brazilian Democratic Socialist. She was known for only changing her mind when in reality she had errored, but was respected by those who worked with her to be a fair but tough negotiator. In her presidency, her goal was to consolidate Lulas achievements, while stepping out of his shadow. Initially this went well, claiming Brazil should become ‘one of the most developed and least unequal nations in the world. She pledged to extradite extreme poverty, and maintain economic stability ‘as a basic value’. In the first ear she fired 7 ministers, though some would call her start cautious. The reality that the cycle of faster economic growth that came with the real plan had run its course. Credit wasn’t growing as fast, people bought things that they couldn’t afford, and manufacturers in Brazil had foreign competition because of Chinas decelerating economy. Dilma received a 70% rating in her first 30 months in office. She had no tolerance for corruption, and the record levverl of unemployment and rising wages made her well like in the middle class. Brazilian politicians say though, that she just made problems and solved none of them.
Social Reform
Nancy Scheper Hughes wrote about the ‘Zona da Mata’ that it was the ‘Brazilian heart of Darkness’, with most sugarcane cutting men unemployed for half the year, and an infant mortality rate of 200 per 1000. A politician once said “the hunger of the region is constant and chronic. Further inland in the Sertao, the drylands at the heart of the NE, half of the 21 million people lived off of subsistence farming. The town suffers from droughts every year and some years they can be very bad, causing town uproars and looting. Brazils NE contains the largest single concentration of poverty in Latin America, all due to unequal land holding, frequent drought, political corruption and backwardness, poor transport infrastructure, and lack of education. This is where democracy has made the biggest difference. Economically the region is starting to catch up with the rest of the country. In the decade from 2000-2010, the regions GDP rose 4.2% a year, but most importantly, the minimum wage rose 60%. Cash in the NE now attracts commerce and consumer goods factories. Under Lula the government began several investment projects in the region, including industrial complexes and oil refineries. The GDP per person in the NE is still well below the National average.
The numbers living in poverty fell by 20 million in 2003. Income inequality fell for the first time since the 60s, and income of the poorest ten percent rose by 91% and only 16% for the richest ten percent in the decade following 2000. These seemed to signal the democracy’s success. Critics of Bolsa Familia claimed that it was just old-fashioned clientelism at large stating ‘Bolsa Familia is the biggest official vote buying program in the world. It accounted for 15% of the reduction in absolute poverty, and pushed the poorest incomes up to the poverty line. Rousseff claimed that absolute poverty (70 reias per person) would be eradicated by the end of her governmental term. Under Brasil sem MIseria she mad cash payments to the poorest and made sure that nobody went unaccounted for. The new term for this group was Class-C, or those having household incomes between 1200-5174 reias a month. This group totaled 100 million people and their basic understanding of what middle class was to them was that they should have a house and a car, though some also felt a computer, credit, and work license were also necessary. The biggest segment of class C is in Montanhao. Many people here are buying cars but many are still very poor. Raw sewage runs in a stream by a supermarket and wooden shacks are still common homes. There is still a sharp difference between the middle class and the C –class. The Brazilian political scientists say that the c-class income would oscilate because of unstable employment of the precariousness of small businesses and because of their tendency to take on excessive debt. Public health as well as other services started rising up. Under Cardosas and Lulas government, family doctors scheme and a community health program were put into place. Important advances in health care included the life expectancy rising by more tan ten years since 1980, to 72.8 years in 2010. Childrens deaths also decreased by 10 to 15.6 per 1000.
Albert Fishlow claims that ‘a totally inclusinve National public system of healthcare does not exist’. Though Brazils national spending was in line that year, half of it was spent on private health care. Dilma Rousseff pointed to a shortage of doctors, but because there are no schools to make doctors, she started educational reforms. One of the keys to keeping an egalitarian lifestyle is to improve public education; it is one of the most important issues in Brazil. The reforms done by Cardoso included decentralizing and reorganizing the school system, gradually eliminating overlaps. Many rural primary schools were mud floored huts, with teachers being paid very poorly. Evaluations of schools around Brazil showed Maranhaos eighth graders only knew as much as 4th graders from Brasilia. Secondary schooling rates leaped because of reforms, prompting a huge expansion of educational coverage. Many schools struggled to find teachers. Claudio Costo was quoted saying, ‘Brazilian teachers are focused on the sociology of education and not on how to teach ten year olds’. The two reasons the government did not start giving money to education, without knowing where it was spent, were Brazil is going through a swift demographic transition so the number of young people is falling, and corruption. Higher education is also increasing. It is three times what it was between 2000-2010, it increased demand unleashed by expansion of c-class. The universities are the best in Latin America but still not great compared to the world. Those with degrees have earned 3.6 times as much as high school graduates. The spending on each university student was five times more per year than for a primary school student. The vast majority of students at public universities were from well off and white families. In a 2010 census, 51% of Brazilians defines themselves as black or brown. The average income of blacks was less than half of whites. Blacks are disadvantaged in levels of education, and more than half the people living in favelas are black. Black Brazilian activists insisted that slavery’s legacy of injustice and inequality could only be reversed by affirmative action policies like the ones in the US. Opponents argued that race relations in Brazil were different than that in the US and that this could generate new race issues. A black activist claims that ‘nobody in the country is racist’, but when two 18 year old kids, one black and one white, apply for a job at a Rio mall, that the white will get the job. Many of the Brazilians who left poverty in the 2000’s were black. Brazil had anti-discrimination legislation but there were never any persecutions until the arrival of American academic ideals. Changing the ideals of all Brazilians was the real goal. Many people in the country believe that blacks are just on the bottom of the pile of injustice. These ideas need to be thrown away to have any sort of change. Favelas started to be removed because of gang violence. A 2010 census found that 1.4 million people live there. Gangs started running favelas and police stopped going there. The new governor Sergio Cabral put into effect police forces that would set up in the Favela. Murder rates immediately dropped. By 2013, trash and illegal electricity diminished, 500 businesses formalized, and open carry of guns virtually stopped. Brazilian policing throughout the rest of the country would not have much success however. Many police killing happened, where innocent civilians were shot countless times. Cardoso drew up a formal plan to uphold human rights and Lula strengthened this. Polls showed that fear of crime were at the top of Brazilian concern. They are less poor, less unequal, and less badly educated than ever before. They still have a long way to go to ensure Democracy protects the rights and lives of all its citizens, but Dilmas prophecy of a middle class society proved true.
The numbers living in poverty fell by 20 million in 2003. Income inequality fell for the first time since the 60s, and income of the poorest ten percent rose by 91% and only 16% for the richest ten percent in the decade following 2000. These seemed to signal the democracy’s success. Critics of Bolsa Familia claimed that it was just old-fashioned clientelism at large stating ‘Bolsa Familia is the biggest official vote buying program in the world. It accounted for 15% of the reduction in absolute poverty, and pushed the poorest incomes up to the poverty line. Rousseff claimed that absolute poverty (70 reias per person) would be eradicated by the end of her governmental term. Under Brasil sem MIseria she mad cash payments to the poorest and made sure that nobody went unaccounted for. The new term for this group was Class-C, or those having household incomes between 1200-5174 reias a month. This group totaled 100 million people and their basic understanding of what middle class was to them was that they should have a house and a car, though some also felt a computer, credit, and work license were also necessary. The biggest segment of class C is in Montanhao. Many people here are buying cars but many are still very poor. Raw sewage runs in a stream by a supermarket and wooden shacks are still common homes. There is still a sharp difference between the middle class and the C –class. The Brazilian political scientists say that the c-class income would oscilate because of unstable employment of the precariousness of small businesses and because of their tendency to take on excessive debt. Public health as well as other services started rising up. Under Cardosas and Lulas government, family doctors scheme and a community health program were put into place. Important advances in health care included the life expectancy rising by more tan ten years since 1980, to 72.8 years in 2010. Childrens deaths also decreased by 10 to 15.6 per 1000.
Albert Fishlow claims that ‘a totally inclusinve National public system of healthcare does not exist’. Though Brazils national spending was in line that year, half of it was spent on private health care. Dilma Rousseff pointed to a shortage of doctors, but because there are no schools to make doctors, she started educational reforms. One of the keys to keeping an egalitarian lifestyle is to improve public education; it is one of the most important issues in Brazil. The reforms done by Cardoso included decentralizing and reorganizing the school system, gradually eliminating overlaps. Many rural primary schools were mud floored huts, with teachers being paid very poorly. Evaluations of schools around Brazil showed Maranhaos eighth graders only knew as much as 4th graders from Brasilia. Secondary schooling rates leaped because of reforms, prompting a huge expansion of educational coverage. Many schools struggled to find teachers. Claudio Costo was quoted saying, ‘Brazilian teachers are focused on the sociology of education and not on how to teach ten year olds’. The two reasons the government did not start giving money to education, without knowing where it was spent, were Brazil is going through a swift demographic transition so the number of young people is falling, and corruption. Higher education is also increasing. It is three times what it was between 2000-2010, it increased demand unleashed by expansion of c-class. The universities are the best in Latin America but still not great compared to the world. Those with degrees have earned 3.6 times as much as high school graduates. The spending on each university student was five times more per year than for a primary school student. The vast majority of students at public universities were from well off and white families. In a 2010 census, 51% of Brazilians defines themselves as black or brown. The average income of blacks was less than half of whites. Blacks are disadvantaged in levels of education, and more than half the people living in favelas are black. Black Brazilian activists insisted that slavery’s legacy of injustice and inequality could only be reversed by affirmative action policies like the ones in the US. Opponents argued that race relations in Brazil were different than that in the US and that this could generate new race issues. A black activist claims that ‘nobody in the country is racist’, but when two 18 year old kids, one black and one white, apply for a job at a Rio mall, that the white will get the job. Many of the Brazilians who left poverty in the 2000’s were black. Brazil had anti-discrimination legislation but there were never any persecutions until the arrival of American academic ideals. Changing the ideals of all Brazilians was the real goal. Many people in the country believe that blacks are just on the bottom of the pile of injustice. These ideas need to be thrown away to have any sort of change. Favelas started to be removed because of gang violence. A 2010 census found that 1.4 million people live there. Gangs started running favelas and police stopped going there. The new governor Sergio Cabral put into effect police forces that would set up in the Favela. Murder rates immediately dropped. By 2013, trash and illegal electricity diminished, 500 businesses formalized, and open carry of guns virtually stopped. Brazilian policing throughout the rest of the country would not have much success however. Many police killing happened, where innocent civilians were shot countless times. Cardoso drew up a formal plan to uphold human rights and Lula strengthened this. Polls showed that fear of crime were at the top of Brazilian concern. They are less poor, less unequal, and less badly educated than ever before. They still have a long way to go to ensure Democracy protects the rights and lives of all its citizens, but Dilmas prophecy of a middle class society proved true.
Chapter 10
The Acu Superport, located where Rio state borders Espirito Santo, was a shipping port idea which included an onshore, dredged port for general cargo, as well as a concrete jetty that extended 3 km into the Atlantic ocean. This jetty lead to a terminal that exported bulk cargoes of iron ore and oil. The port was the center of an entire industrial complex, comprising a power plant big enough to supply electricity to 20 million people. This included two steelworks, brazils biggest shipyard, and a new town to house 250 thousand people. This complex was the size of Manhattan with the building cost of 50 billion US dollars. This idea was the plan of Eike, who set up in Canada for a while in the 80s, but returned to Brazil in 2000. He firsts bought concessions for iron ore and oil, claiming that he had ‘assets not money’. By 2012, he was the 7th richest person in the world, with Brazils leading new weekly portraying him as ‘Eike Xiaoping’, along with the line ‘to get rich is glorious’. Skepticism built in several financial markets as Eikes companies missed production deadlines. Eike sold iron ore deposits for 4.8 billion, and OGX announced that its only oil producing wells would be shut down. EIG, an American investment fund, bought a controlling stake in the Acu superport. Then OGX filed for bankruptcy and days later, so did OSX, the shipbuilding company. Eike was lucky to emerge with more than a few million dollars and no lawsuits.
Some saw Eike’s rise and demise as a metaphor for that of the country. The real story of Brazils industries is much more durable. Petrobras founded by vargas in 1954, started finding more and more crude oil offshore. Eventually they struck big at pre-sal, an oil deposit 300km offshore from santos. Estimates for potentially recoverable oil ranged from 50-80 billion barrels. Petrobras granted 30% stake in every field under Rousseff. Oil was property of the Pre-Sal Petrolio SA, ensuring that 70% of the equipment used must be nationally produced. Quickly it was clear that the Petrobras had overreached. With the Petrobras visibly struggling with too many projects, too few qualified staff, and equipment delays, Dilma appointed Maria dos Gracas Foster as its CEO. She was an engineer, Petrobras staffer, and also from the Favelas. She said that they needed to reduce the Petrobras operational costs. Brazil was stated by Lula to, in 20 to 30 years time, reach the greatest energy power on the planet. Brazil is currently an agricultural superpower. Since Cadoso put an end to export taxes on food commodities, they have seen a surge in production. Grains and oil seeds are up 140 % in 1991-2011. The overall share of world agricultural exports climbed from 2.4% in 1990 to 5.2% in 2011. The Cerrado was previously seen as too acidic to grow on,, but scientists treated the soil with lime and new varieties of soybeans began to grow. Even though this was true, and a railroad connecting Sao Paolo and Santos to Rondopolis, Brazilians neglect for infrastructure meant that soy growers in Mato in 2010 had to spend 38 percent of gross income on transport, leaving profits low. Two other criticisms of British farming were unequal holding of land where 1.1 percent of the farmers owned 45% of the land, and agrarian reform. The chainsaw and bulldozer destroyed the Amazonia, used for railways and logging. The most decimation happened in the ‘arc of deforestation’, which included the southern rim of the forest, from Rondonia and North Matto Grasso to Para. Two opposing Brazilian visions of the Amazon became clear in the 1990’s, the aim of policy should be economic development, and the others wanting the Amazon protected. The amazon is not just the largest rainforest in the world, but also the largest carbon sink, and one of the biggest troves of biodiversity. Climate change has affected the amazon, with southern parts much drier, and the area could face fire and disaster. Brazil has, in the last two decades, acquired the tools to control deforestation, with the government designating 42% of it as a protected area. The rate of efforts to control deforestation saw that it would decrease dramatically. In July 2012, INPE’s data showed that deforestation was down from 30 thousand square miles in 2005 to almost 5000. Indian tribes were also healthier and more successful at last. In 1960, their total population had fallen below 100000 and they faced possible execution. Thanks to better health care including the measles vaccine, and above all better protection for lands, they started to bounce back. Still there are dozens of uncontested tribes in Brazil. Seeking to develop Brazils resources sustainability involved difficult trade offs though. One problem was the long battle in congress over a new national forest code. Farmers were arguing the forest code from 1965 was one that was unenforceable. The new code though, lead to a rise in deforestation that year according to the greens, and the solution involved building hydroelectric dams in the Amazon, as most of Brazils untapped hydropower lies in the amazon.
Some saw Eike’s rise and demise as a metaphor for that of the country. The real story of Brazils industries is much more durable. Petrobras founded by vargas in 1954, started finding more and more crude oil offshore. Eventually they struck big at pre-sal, an oil deposit 300km offshore from santos. Estimates for potentially recoverable oil ranged from 50-80 billion barrels. Petrobras granted 30% stake in every field under Rousseff. Oil was property of the Pre-Sal Petrolio SA, ensuring that 70% of the equipment used must be nationally produced. Quickly it was clear that the Petrobras had overreached. With the Petrobras visibly struggling with too many projects, too few qualified staff, and equipment delays, Dilma appointed Maria dos Gracas Foster as its CEO. She was an engineer, Petrobras staffer, and also from the Favelas. She said that they needed to reduce the Petrobras operational costs. Brazil was stated by Lula to, in 20 to 30 years time, reach the greatest energy power on the planet. Brazil is currently an agricultural superpower. Since Cadoso put an end to export taxes on food commodities, they have seen a surge in production. Grains and oil seeds are up 140 % in 1991-2011. The overall share of world agricultural exports climbed from 2.4% in 1990 to 5.2% in 2011. The Cerrado was previously seen as too acidic to grow on,, but scientists treated the soil with lime and new varieties of soybeans began to grow. Even though this was true, and a railroad connecting Sao Paolo and Santos to Rondopolis, Brazilians neglect for infrastructure meant that soy growers in Mato in 2010 had to spend 38 percent of gross income on transport, leaving profits low. Two other criticisms of British farming were unequal holding of land where 1.1 percent of the farmers owned 45% of the land, and agrarian reform. The chainsaw and bulldozer destroyed the Amazonia, used for railways and logging. The most decimation happened in the ‘arc of deforestation’, which included the southern rim of the forest, from Rondonia and North Matto Grasso to Para. Two opposing Brazilian visions of the Amazon became clear in the 1990’s, the aim of policy should be economic development, and the others wanting the Amazon protected. The amazon is not just the largest rainforest in the world, but also the largest carbon sink, and one of the biggest troves of biodiversity. Climate change has affected the amazon, with southern parts much drier, and the area could face fire and disaster. Brazil has, in the last two decades, acquired the tools to control deforestation, with the government designating 42% of it as a protected area. The rate of efforts to control deforestation saw that it would decrease dramatically. In July 2012, INPE’s data showed that deforestation was down from 30 thousand square miles in 2005 to almost 5000. Indian tribes were also healthier and more successful at last. In 1960, their total population had fallen below 100000 and they faced possible execution. Thanks to better health care including the measles vaccine, and above all better protection for lands, they started to bounce back. Still there are dozens of uncontested tribes in Brazil. Seeking to develop Brazils resources sustainability involved difficult trade offs though. One problem was the long battle in congress over a new national forest code. Farmers were arguing the forest code from 1965 was one that was unenforceable. The new code though, lead to a rise in deforestation that year according to the greens, and the solution involved building hydroelectric dams in the Amazon, as most of Brazils untapped hydropower lies in the amazon.
Chapter 11
Embraer has found success since privatization, as the third largest maker of commercial jet aircrafts, sold mainly to North American regional airlines. After the economic slowdown in 2008, the aircraft industry was hit hard, forcing Embraer to lay off workers and giving them international competition in the market. They decided since they already had reliable planes and an established brand, they would make the same planes but more fuel efficient and diverse in other ways. Embraer always has been trusted on innovation rather than government protection. Similar to WEG, an electric motor company from Brazil that not many people have heard of, but is one of the top three electric motor companies in the world. They got successful based on the quality of their work as well.
Manufactured products made up 55% of Brazils exports in 1985, but only 36% in 2011, due to stagnation after the slump of 2008. The reals appreciation had somewhat to do with this. The government response to the appreciation of the real and fear of de-industrialization was a more interventionist industrial policy. Only 10 Brazilian firms ranked in the financial times list of the top 500 global companies by market capitalization. The BNDES role was to offer long-term funding for infrastructure projects. Car manufacturing was a quick process here as major companies came together to make manufacturing easier. The car industry accounted for a fifth of the manufacturing industry in 2012, and added 150000 direct jobs. The vehicle fleet more than doubled in the decade leading to 2012. Even in the diminished state Brazil is in, it retained a large and diversified manufacturing base. This is because their successful companies focus on innovation, and a reputation for quality. The OECD found that 40% of Brazil economic growth of the past decade was a result of the expansion of the labor force. The Brazil cost was the inability of Brazilian companies to keep pace with the rest of the world in efficiency. This was due to taxes which were poorly designed, and regressive, and some felt that indirect taxes would be more economically efficient. For most of the past two decades, Brazil had some of the highest interest rates int he world. A big problem for business at the time was forest regulations and red tape. They ranked 130th of 185 in the world at ease of doing business. The lack of transport infrastructure was taking a toll, as farmers said 10 million tonnes of grains were lost during transport, and tens of millions of Brazilian workers losing thousands of hours of work due to traffic jams. According to press reports, only 1/3 of the planned investment in transport under Lulas growth acceleration program was used for actual transport funding. The Brazil cost not only affected industry, but farmers and service businesses too. Nevertheless, the past decade has seen the rise of Brazilian multinationals. The depreciation of the real in 2013 was likely to lift a lot of the short term pressure on industry, with the best protection against change being to focus on productivity. More educated people in Brazil, due to better schools and universities, has seen more scientific research being done. "The culture of innovation has finally arrived in Brazil".
Manufactured products made up 55% of Brazils exports in 1985, but only 36% in 2011, due to stagnation after the slump of 2008. The reals appreciation had somewhat to do with this. The government response to the appreciation of the real and fear of de-industrialization was a more interventionist industrial policy. Only 10 Brazilian firms ranked in the financial times list of the top 500 global companies by market capitalization. The BNDES role was to offer long-term funding for infrastructure projects. Car manufacturing was a quick process here as major companies came together to make manufacturing easier. The car industry accounted for a fifth of the manufacturing industry in 2012, and added 150000 direct jobs. The vehicle fleet more than doubled in the decade leading to 2012. Even in the diminished state Brazil is in, it retained a large and diversified manufacturing base. This is because their successful companies focus on innovation, and a reputation for quality. The OECD found that 40% of Brazil economic growth of the past decade was a result of the expansion of the labor force. The Brazil cost was the inability of Brazilian companies to keep pace with the rest of the world in efficiency. This was due to taxes which were poorly designed, and regressive, and some felt that indirect taxes would be more economically efficient. For most of the past two decades, Brazil had some of the highest interest rates int he world. A big problem for business at the time was forest regulations and red tape. They ranked 130th of 185 in the world at ease of doing business. The lack of transport infrastructure was taking a toll, as farmers said 10 million tonnes of grains were lost during transport, and tens of millions of Brazilian workers losing thousands of hours of work due to traffic jams. According to press reports, only 1/3 of the planned investment in transport under Lulas growth acceleration program was used for actual transport funding. The Brazil cost not only affected industry, but farmers and service businesses too. Nevertheless, the past decade has seen the rise of Brazilian multinationals. The depreciation of the real in 2013 was likely to lift a lot of the short term pressure on industry, with the best protection against change being to focus on productivity. More educated people in Brazil, due to better schools and universities, has seen more scientific research being done. "The culture of innovation has finally arrived in Brazil".
Chapter 12
Brazilian Policy makers have always believed their country is destined to be a super power, with their continental scale and wealth of resources. Brazilian intellectuals saw their country as part of the Atlantic world, rather than Latin America. In the decades following the advent of the New Republic, and the end of the cold war, Brazilian foreign policy has evolved in several directions. The region has become the top foreign policy priority, and Brazil has given growing importance to seeking alliances with other rising powers, what it sometimes calls the 'global south'. Brazil also has looked to expand is worldwide diplomatic presence. Under Cardoso, Brazil began to seek a broader role in the region. He successfully mediated a conflict between Peru and Equador. Lula dropped Brazils tradition of non-intervention, sometimes siding with other left wing Latin American leaders in their domestic political battles. Yet many conservative Brazilians found it hard to see their country as similar to peru or other spanish speaking Latin American countries. A Brazilian novelist once ranted "... an Argentine considers himself as similar to a Brazilian as a German to a Turk". The easy going-ness Brazil had with other South American countries, all while instilling the 'gentle giant' image through grandeur, caused issues in economic development. Some Brazilian industrialists became alarmed by the countries isolation from world trade. A former ambassador who headed the Brazil-China business council, argued that the response to the growth in Chinese imports was for Brazil to lead a move to tear down trade barriers across Latin America. Lula and George W. Bush were good at working with one another. For bush, Brazil was a very potential energy producer, and for Lula, good relations with the US were important for his political balancing act between business and the left. Brazil and the US are, and will remain friends. BUt they arenot likely to soon emerge as partners or allies. This is because of Brazils new stature in the world, mainly by acting on its own and disagreeing with the US. Some issues have provoked friction between the two world powers, including nuclear technology, as Brazil holds the sixth largest uranium deposit in the world. There were also misunderstandings in the relationship, as the US wanted trade, investment, and energy, as well as to coordinate a policy with Brazil and Latin America, and Brazil wanted to be treated as a superpower. With 190000 troops, Brazil's army is smaller than Columbias. They are a conservative armed forces, with veto power over some issues. Cardoso took on the task of reequipping the armed forces, with Lula later launching a big procurement plan. But Brazil had few incentives, and less spare resources, to invest in military hardware. Globalization and current world order has brought Brazil more benefits than problems.
Chapter 13
More than a million people poured into eighty cities in the country following police brutality at rallies aimed to protest a bus fare increase. This eighty percent of the population who were protesting, spend four hours a day on crowded public transportation. The fading of the economic boom and increased inflation also has caused some disgruntlement. Ironically, Dilma set out to improve public services, but many were upset when she did little about it, and continued to build a new stadium for the confederations cup. After still receiving backlash, she set out 5 pacts, one of which promised to spend more on public transport. If spending in the country is to meet the changing needs of society, more should be spent on health and education. Brazil is aging fast, with the average Brazilian woman having more than six kids in 1960 compared to two for families now. This has cause a 'demo graphical bonus' where there are more workers than dependents (children, old people). Spending less on pensions is a must, as well as spending more on education, especially expanding pre-school coverage. Brazilian politicians though, have enjoyed a deep-rooted sense of entitlement and a tradition of impunity. Yet it would be a gross exaggeration to imagine that Brazilian politics was irredeemably corrupt and clientelistic. According to Joaquim Barbosa, "Brazil is a country that punishes many poor people, black people, and people without connections. People are treated differently based on status, skin color and money that they have... A powerful person can hire powerful lawyers with connections in the judiciary who can maintain contacts with judges without any control by the public prosecutor or by society. And then surprising decisions follow".
Chapter 14
The only other time Brazil hosted the world cup, it proved to be a national humiliation. Brazil faced uruguay with 200000 Brazilians packed into the Maracana stadium. Brazil lost the game with two late goals by Uruguay sealing their fate. The loss was considered one that "could not be cured" as many believed that Brazil had the best players in the world. Rodrigues claims they had lost faith in themselves. When Lula talked of a country that had recovered its self esteem, it rang true as Brazil was awarded the Rio Olympics. People began to believe in Brazil again. There were clear signs that the cycle of economic reform and social progress unleashed by the established democracy and by the real plan had run its course. Brazil has amassed some formidable economic strengths, including farming, its oil, gas and ethanol industries, and a growing base of science and research. So will the 21st century be Brazils century as Lula proclaimed? There can be a trend seen in economic growth of recent, and it is slowing. This may be because Brazil has an allergy to liberalism. The PT and the PSDB became the rivaling parties in Brazil. The great debate in Brazilian politics is between modern and archaic, not left and right, according to Mario Simonsen. Te 2014 election may produce a change in political direction, but whether it does or not, the Brazilian people, who are becoming more educated and entrepreneurial, may take a hand in the direction of public policies. Three times in the last quarter-century, Brazil's public have taken to the streets to peacefully protest the status quo. The first time they received democracy, the second time they got Collor out of office, and now they are looking for the reform of public services and political accountability in 2013. Brazilians want to make their country from the bottom up now, with two decades of achievements to build on.